Perverted Commas?

Of the many accomplishments of the fiction-writer's art, dialogue is surely the least exalted, the literary equivalent of peeling onions during the course of preparing a grand feast. While theoretically it could call for quite as great a level of skill as the narrative that surrounds it, in practice it hardly ever displays evidence of any such effort, particularly in the contemporary novel. All too often, dialogue is simply the default way of maintaining a vague sense of momentum, or a recognition that, with any luck, the novel will end up as a film treatment anyway, and here is the embryonic screenplay ...

Stuart Walton on the Guardian blog has a sound-off about dialogue in modern fiction as:

... a fairly obvious bulking agent in the kind of writing that isn't about narrative drive ...

and has a go at writers (such as Iris Murdoch and Henry James) who:

... never got the hang of dialogue, but persisted anyway...

If so many writers fail at writing dialogue, as Mr. Walton suggests, why is it so hard to get it right? (And it is difficult! Many is the page of aborted conversation I've scrunched into the bin.)

Which writers do you think handle dialogue well? I love Roddy Doyle's dialogue in The Barrytown Trilogy (though Mr. Walton probably wouldn't have approved of the "rendering of accents" , and Magnus Mills' utterly banal conversations (used to great comic effect) in The Restraint of Beasts. Paul Auster also handles dialogue very well in The Brooklyn Follies where the plot is very much developed through conversations. Readers of the blog have plenty more suggestions to add in the comments.

And how do you prefer your dialogue to be punctuated? James Joyce took against what he called "perverted commas" preferring the long dash, while writers such as James Kelman, for example, use no punctuation marks at all, leaving the writer to work out where the conversation begins and ends. (I must say, I like this method the best.)